5 ms·

The benefactors who currently own these homes are passing them down to relatives without passing down the new higher property tax. What's more is that homes tha

The benefactors who currently own these homes are passing them down to relatives without passing down the new higher property tax. What's more is that homes that people who were 'lucky' to buy in the past, such as Palo Alto properties, benefited from white-only clauses: "No person not wholly of the white Caucasian race shall use or occupy such property unless such person or persons are employed as servants of the occupants." - https://www.paloaltoonline.com/news/2019/03/29/housings-troubled-history-of-discrimination https://www.paloaltoonline.com/news/2019/03/29/housings-trou... It's historically unfair, and nothing to my knowledge has been done to undo the damage from discriminatory housing policies. If you want to read more, here's a recent 2019 study review on the economic damage from unfair housing policies in Chicago: https://www.npr.org/local/309/2019/05/30/728122642/contract-buying-robbed-black-families-in-chicago-of-billions https://www.npr.org/local/309/2019/05/30/728122642/contract-...

bluejekyll 7y ago
I believe the tax can only be passed on to children. Not “relatives” in general. It’s still worthy of debate if this should be the case, but it’s not as broad as giving it to your nieces or nephews.
- spamizbad 7y ago
  Adult adoption is legal and IIRC fairly permissive in California. Plus isn't there that whole LLC loophole?
  - dartdartdart 7y ago
    Can you elaborate on the loophole? Like create a 1 person LLC, and then buy the property as a business expense?
- redis_mlc 7y ago
  > I believe the tax can only be passed on to children. Not “relatives” in general. I know a nephew who got it. And of course, corporations. The horrors of an elderly Google being taxed out of their home in old age! And don't forget the farmstead discount, which Apple executives love using for their mansions.
  - dartdartdart 7y ago
    What's the farmstead discount?
- dragonwriter 7y ago
  > It’s still worthy of debate if this should be the case, but it’s not as broad as giving it to your nieces or nephews. Prop 58 allowed exchanges between parents and children (in either direction), Prop 193 expanded it to include those between grandparents and grandchildren (in either direction). So you can't do it directly to nephews/nieces (or aunts/uncles), but if you have the right set of living, willing relatives to combine a prop 193 transfer and a prop 58 transfer you can do it.
  - masonic 7y ago
    But neither of those policies is the result of Prop 13, which is what the parent implied.
JMTQp8lwXL 7y ago
Yet, somehow SCOTUS failed to consider this a violation of the Equal Protection Clause. https://supreme.justia.com/cases/federal/us/505/1/ https://supreme.justia.com/cases/federal/us/505/1/
- 3fe9a03ccd14ca5 7y ago
  I believe that if you take time to read the (8-1!) opinion of the court you’ll understand why. > In permitting longer term owners to pay less in taxes than newer owners of comparable property, Article XIIIA's assessment scheme rationally furthers at least two legitimate state interests. First, because the State has a legitimate interest in local neighborhood preservation, continuity, and stability, it legitimately can decide to structure its tax system to discourage rapid turnover in ownership of homes and businesses. Second, the State legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner, who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high. The repercussions of striking the law down would have some serious side effects. Would rent control laws be constitutional? https://www.law.cornell.edu/supct/html/90-1912.ZS.html https://www.law.cornell.edu/supct/html/90-1912.ZS.html
  - JMTQp8lwXL 7y ago
    So we should be preserving "local neighborhood preservation, continuity, and stability" when these neighborhoods were white-only? We don't allow redlining. This is essentially saying, the state has a legitimate interest in preserving neighborhoods formed by redlining.
    - 3fe9a03ccd14ca5 7y ago
      To go back to my previous point, would you support repealing rent-control laws because they act to “preserve neighborhoods” and discourage newcomers? Besides, to argue that a state-wide referendum is unconstitutional is already a tall order, as you can imagine.
m463 7y ago
I think the actual benefactors are commercial property owners, who will keep the properties forever and lease them out with very little tax burden. On the other hand, I question that if prop 13 is "straightened out", will the increased revenue make other taxes go down?
- Gibbon1 7y ago
  My take is commercial interests were the ones behind prop 13. The other negative side of Prop 13 is the property tax rate is too low to support government services which makes California more dependent on income and other taxes. That tends to discourage cities from allowing new units to be built. And to charge high fees for new housing units. There is this other lesser known shitshow because historically cities and counties had widely different income sources. Some got all of their funds via property taxes. Others imposed special purpose taxes. The former got hosed by prop 13.
new_realist 7y ago
Doesn’t Prop 13 prevent minorities from being forced out of rapidly gentrifying neighborhoods due to rising property taxes? I fear that would be the effect of any repeal. Prop 13 seems like rent control for homeowners.
- deleted 7y ago
  [deleted]
- epistasis 7y ago
  This sounds like the classic bait and switch: give a minuscule tax break to those without much ability to pay, and a simultaneous order of magnitude larger tax break to those that are swimming in cash. Other states have homestead protection on property taxes. This is what would have been passed if there was actually any concern for low- or fixed-income homeowners, instead of a system that reinforces wealth inequality. The harm done by Prop 13 by restricting access to ownership to only those with more money, and by further weakening services in historically disinvested neighborhoods, has surely outweighed any possible benefit for those in gentrifying neighborhoods. Property taxes are such a small part of a mortgage payment that the gains in property value far offset any increase in taxes. The idea of “getting taxed out of your home” is not as bad of a red herring as talking about not wanting to get more income because of getting bumped into the next tax bracket (taxes don’t work that way), but it’s a similar misunderstanding of finances.
masonic 7y ago
Racial covenants were rendered invalid in 1948 by SCOTUS (Shelley v. Kraemer), so very little SV housing was affected by legal discrimination.

bluejekyll 7y ago

I believe the tax can only be passed on to children. Not “relatives” in general. It’s still worthy of debate if this should be the case, but it’s not as broad as giving it to your nieces or nephews.

spamizbad 7y ago
Adult adoption is legal and IIRC fairly permissive in California. Plus isn't there that whole LLC loophole?
- dartdartdart 7y ago
  Can you elaborate on the loophole? Like create a 1 person LLC, and then buy the property as a business expense?
redis_mlc 7y ago
> I believe the tax can only be passed on to children. Not “relatives” in general. I know a nephew who got it. And of course, corporations. The horrors of an elderly Google being taxed out of their home in old age! And don't forget the farmstead discount, which Apple executives love using for their mansions.
- dartdartdart 7y ago
  What's the farmstead discount?
dragonwriter 7y ago
> It’s still worthy of debate if this should be the case, but it’s not as broad as giving it to your nieces or nephews. Prop 58 allowed exchanges between parents and children (in either direction), Prop 193 expanded it to include those between grandparents and grandchildren (in either direction). So you can't do it directly to nephews/nieces (or aunts/uncles), but if you have the right set of living, willing relatives to combine a prop 193 transfer and a prop 58 transfer you can do it.
- masonic 7y ago
  But neither of those policies is the result of Prop 13, which is what the parent implied.

JMTQp8lwXL 7y ago

Yet, somehow SCOTUS failed to consider this a violation of the Equal Protection Clause. https://supreme.justia.com/cases/federal/us/505/1/ https://supreme.justia.com/cases/federal/us/505/1/

3fe9a03ccd14ca5 7y ago
I believe that if you take time to read the (8-1!) opinion of the court you’ll understand why. > In permitting longer term owners to pay less in taxes than newer owners of comparable property, Article XIIIA's assessment scheme rationally furthers at least two legitimate state interests. First, because the State has a legitimate interest in local neighborhood preservation, continuity, and stability, it legitimately can decide to structure its tax system to discourage rapid turnover in ownership of homes and businesses. Second, the State legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner, who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high. The repercussions of striking the law down would have some serious side effects. Would rent control laws be constitutional? https://www.law.cornell.edu/supct/html/90-1912.ZS.html https://www.law.cornell.edu/supct/html/90-1912.ZS.html
- JMTQp8lwXL 7y ago
  So we should be preserving "local neighborhood preservation, continuity, and stability" when these neighborhoods were white-only? We don't allow redlining. This is essentially saying, the state has a legitimate interest in preserving neighborhoods formed by redlining.
  - 3fe9a03ccd14ca5 7y ago
    To go back to my previous point, would you support repealing rent-control laws because they act to “preserve neighborhoods” and discourage newcomers? Besides, to argue that a state-wide referendum is unconstitutional is already a tall order, as you can imagine.

m463 7y ago

I think the actual benefactors are commercial property owners, who will keep the properties forever and lease them out with very little tax burden. On the other hand, I question that if prop 13 is "straightened out", will the increased revenue make other taxes go down?

Gibbon1 7y ago
My take is commercial interests were the ones behind prop 13. The other negative side of Prop 13 is the property tax rate is too low to support government services which makes California more dependent on income and other taxes. That tends to discourage cities from allowing new units to be built. And to charge high fees for new housing units. There is this other lesser known shitshow because historically cities and counties had widely different income sources. Some got all of their funds via property taxes. Others imposed special purpose taxes. The former got hosed by prop 13.

new_realist 7y ago

Doesn’t Prop 13 prevent minorities from being forced out of rapidly gentrifying neighborhoods due to rising property taxes? I fear that would be the effect of any repeal. Prop 13 seems like rent control for homeowners.

deleted 7y ago
[deleted]
epistasis 7y ago
This sounds like the classic bait and switch: give a minuscule tax break to those without much ability to pay, and a simultaneous order of magnitude larger tax break to those that are swimming in cash. Other states have homestead protection on property taxes. This is what would have been passed if there was actually any concern for low- or fixed-income homeowners, instead of a system that reinforces wealth inequality. The harm done by Prop 13 by restricting access to ownership to only those with more money, and by further weakening services in historically disinvested neighborhoods, has surely outweighed any possible benefit for those in gentrifying neighborhoods. Property taxes are such a small part of a mortgage payment that the gains in property value far offset any increase in taxes. The idea of “getting taxed out of your home” is not as bad of a red herring as talking about not wanting to get more income because of getting bumped into the next tax bracket (taxes don’t work that way), but it’s a similar misunderstanding of finances.

masonic 7y ago

Racial covenants were rendered invalid in 1948 by SCOTUS (Shelley v. Kraemer), so very little SV housing was affected by legal discrimination.